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Can I cash in my pension?

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  • jamesd
    jamesd Posts: 26,103 Forumite
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    edited 11 January 2014 at 11:43PM
    Talyn, that's probably an accurate description of the limitations of the ReAssure product. It's not a description of the full range of options available. Those include transferring into any number of pieces, with lump sums that can be taken independently for each piece if desired. Income drawdown can take regular income as well as lumps each year, or any mixture of the two. Any number of annuities can be purchased at any time after transfer to a less limited product.
  • Talyn
    Talyn Posts: 17 Forumite
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    Jamesd - True, but for those options the fund transfer value would have to be transferred into a product with those options. Where it is currently doesn't have that options. So I listed the options available to him as it currently is including the option to transfer to another product.
  • Many thanks for the replies. I've now got a clearer idea of the options available. My preferred route looks like being a transfer to a scheme that will allow me to take the 25% tax-free cash now, but leave the rest deferred for a few more years. I have a feeling that the next step should probably be to engage an IFA to help on this, as I am obviously very unfamiliar on the technical details of pensions.
  • mark55man
    mark55man Posts: 8,208 Forumite
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    THe IFA can do a couple of things -
    a advise on onward investment strategy
    b ensure there were no valuable bonuses (GARs) on your old product
    c offer technical advice on structuring of pensions, ISA, lump sums recycling


    Whilst we all may have opinions and experience on a. it is unlikely that private individuals will be able to help themselves with b and c
    I think I saw you in an ice cream parlour
    Drinking milk shakes, cold and long
    Smiling and waving and looking so fine
  • jamesd
    jamesd Posts: 26,103 Forumite
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    LordLucan, yes, I agree that an IFA is a good choice for you given the amount involved here and your apparent relative inexperience with investing. They can be found via unbiased.co.uk if you don't have a personal recommendation from someone.

    Since you intend to continue working you should ask the IFA about taking the maximum capped drawdown income now and recycling that income into more personal pension contributions. This produces a tax gain for you compared to just leaving the money in the existing pot.
  • Talyn
    Talyn Posts: 17 Forumite
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    LordLucan - also ask ReAssure for a Transfer Quotation. It should show you what would physically be moveable in £'s and list any penalties or deductions that might apply. And you may as well also ask them for projections to age x (age of your choice - say 65 and 75?) as that will give you an idea of what figures might be involved if you left it - that gives you something to show an IFA so they can compare figures.
  • tgon
    tgon Posts: 710 Forumite
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    My wife has been given a Trivial Lump Sum quotation of £8433 consisting of £2108 tax tree and £6325 taxable through PAYE. As she has no income from her own sources can I assume the total amount is tax free in the current year?
  • Linton
    Linton Posts: 18,155 Forumite
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    tgon wrote: »
    My wife has been given a Trivial Lump Sum quotation of £8433 consisting of £2108 tax tree and £6325 taxable through PAYE. As she has no income from her own sources can I assume the total amount is tax free in the current year?

    Correct, though you may find that 20% tax is deducted and will have to be reclaimed from HMRC.
  • tgon
    tgon Posts: 710 Forumite
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    edited 19 January 2014 at 8:00PM
    Thanks. Checking with HMRC it seems she would have to claim PAYE tax back on form P53 as the pension administrator would deduct tax 20% and issue a P45. I wish there was an equivalent form to notifying at source that tax does not need deducting such as the R85 form for bank interest!
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    unless ill health, however at a certain age you could be eligible for a tax free lump sum depending on what pension provider your with lxxxxx@hotmail.co.uk

    Tut tut. read the forum rules.

    Spam!
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